Salzer Electronics targets 9.5% EBITDA margin in FY27 after commodity cost pressures
Management's margin recovery hinges on price hikes passing through, but execution risks remain.
What management said
- Revenue grew 26% YoY to ₹474 crore in Q4FY26, driven by industrial switchgear and wires & cables.
- EBITDA margin contracted to 7% in Q4 due to commodity cost spikes; target of 9–9.5% for FY27.
- Smart metering business yet to secure large orders; ₹22 crore inventory held.
- Saudi Arabia plant delayed to September–October 2026 due to Middle East tensions.
The brief
Salzer Electronics reported a 26% YoY revenue jump to ₹474 crore in Q4FY26, but EBITDA margins dropped to 7% due to rising commodity costs. Full-year revenue reached ₹1,758 crore (+24%), with PAT at ₹54 crore (+3%). Management cited plastic, copper, and silver price hikes that eroded 2–3% of margins. To recover, they raised prices by 15% in February and plan another 7–10% hike in June 2026, expecting margins to stabilize at 9–9.5% for FY27. The smart metering business remains nascent, with no large orders yet, though a ₹200 crore Bangalore project will contribute from Q2. Exports fell 5% due to US tariffs and Middle East disruptions. Debt stood at ~₹500 crore, and management aims to reduce working capital to 25% of revenue. The verdict: Management's margin recovery narrative is credible but hinges on timely price pass-through and demand sustenance.
In their words
“We expect margins will stabilize in Q2 of FY27.”— Rajeshkumar Doraiswamy — Joint Managing Director
“Our single client concentration is Schneider Electric which will be close to around 12% of our total revenue.”— Rajeshkumar Doraiswamy — Joint Managing Director
“We will definitely reach 9 and a half, 10% EBITDA margin... unfortunately situations beyond our control.”— Rajeshkumar Doraiswamy — Joint Managing Director
Summarised from the Salzer Electronics Limited Q4 2026 earnings-call transcript. View transcript.